It is deeply frustrating to see public funds being wasted to defend those who lost money in the Hanover debacle.

What is often forgotten in this long-running saga is that any of the 16,000 investors who lost money in Hanover have been entitled to avail themselves of the same sections of the Securities Act that the FMA has elected to use.

They have not. Not one of the 16,000. Yet taxpayers are funding this expensive legal fishing trip on their behalf.

The FMA seeks to restore confidence in the securities market and they are entitled and perhaps even obligated to pursue this matter. Yet I find something disquieting about seeing Hotchin's assets frozen for more than a year, not charged with any crime and having a civil case against him funded by taxpayers rather than those who suffered losses. If only he were as charming as Kim Dotcom.

If the FMA wins, the aggrieved Hanoverians will get paltry compensation and taxpayers will get some, but not all, of their legal costs back.

If the FMA loses, as it very well may, taxpayers will get what we always get. The bill.

The FMA's case is this: Hotchin, Watson, Sir Tipene and others agreed to the release of a prospectus, and possibly some advertising, to the public. That prospectus and or said advertising contained untrue statements. If these two things are correct then those named face civil liability for the losses suffered.

They could face a pecuniary penalty as well but the FMA must bring this case within two years of finding the dishonesty so it may be too late. Seeking a pecuniary penalty is an action limited to the FMA.

However, before any compensation is awarded it must be shown that money was invested "on the faith of an advertisement or registered prospectus".

It seems unlikely that those who invested in Hanover were reading the prospectuses being issued, even more unlikely to have been influenced by their contents. They recognised the brand, liked Richard Long, and would not know an Ebit from an elf.

However, the 16,000 have an even bigger problem winning any compensation because, back in 2009, they elected to swap their impaired debt for shares in Allied Farmers.

Now, that deal looks to have been about as smart as kissing a scorpion but that is what these "investors" did.

Guardian Trust, at the time, told them they needed to weigh up what they were giving up for "... an investment in Allied, which may be traded on the stock market at the prevailing market price" before pointing out that the prevailing market price would be lower than Allied's current price.

They walked away from their rights as bond holders when they voted for that deal.

If they want to sue someone for their past mistakes let them do so on their own dime.